Could it get any worse for Toyota? (The short answer is, yes, but more on that later.) Yesterday it was reported that the US government authorities are now investigating whether or not the Toyota jewel in the crown, the Prius hybrid, might have to be recalled for faulty brakes.

As they say, when it rains it’s a monsoon!

The Toyota CEO (Mr. Toyoda, grandson of the founder) held a news conference in Japan today and offered the obligatory Japanese apology. Good for him. But, his company still has a long way to go to reclaim the trust of US car buyers and other key stakeholders.

As I have been writing all week on this blog, Toyota has really mishandled this recall and unintended acceleration crisis. Let me enumerate:

• Toyota was way too slow in responding to the growing crisis and getting out there to allay the major concerns amongst customers, dealers and the public at large.
• The company’s unintended acceleration problem has actually been festering for nearly a decade now. Toyota has been trying to tamp it down and hope it goes away, but that hope was lost when four people were killed in a Lexus last August in San Diego. The cause of the crash: a stuck accelerator that made the Toyota-made car fly out of control.
• Toyota has not been communicating very much or frequently with its vehicle owners; talk about a massive crisis communications mistake.
• Toyota’s first ad campaign on the crisis (print ads that started running last Sunday the 31st) was pretty lame. The ads inexplicably focused more on the Toyota plants shutdown than on the real problems that caused the crisis in the first place.
• Toyota’s US President Jim Lentz finally did media interviews on Monday the 1st (what took him so long?), and his comments were less than confidence inspiring.
• The company is rejecting out of hand any possibilities that a serious electronic glitch could also be a cause of the unintended acceleration. The fact is, Toyota does not really know what the cause is, and that was made clear when Lentz announced Toyota’s sticky gas pedal "fix." He said that the repairs "solve the issues that we know of." Wow, that is a pretty big caveat from the Toyota chief.

Toyota needs to start telling the whole truth regarding this crisis and its causes, and they need to do it right now. Toyota’s sales numbers are dropping like a stone (they declined 16% already in Jan.). And, the authoritative Kelley Blue Book just released results of a survey that showed a sharp drop in the number of people who put Toyota on their car purchase preference list. That is a terribly ominous sign for the Toyota brand.

If Toyota does not begin acting truly in the public’s interest, their Tylenol Moment could turn into a replay of the Audi Catastrophe of the 80s.

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